Gross written premiums amounted to £208 million, with lower average premiums than previously recorded, primarily reflecting lower claims frequencies, a competitive pricing environment, a change in mix of customers to lower risk segments, as well as the ongoing support given to Hastings’ customers.
Rate reduction have been observed across the UK motor market during Q1. Hastings has remained disciplined in its pricing approach, including unwinding COVID-related pricing discounts, resulting in live customer policies broadly stable compared to the year end at 3.1 million, and up 7% year on year. Customer retention rates continue to be high and above market averages.
Motor claims frequencies have remained low, reflecting reduced motor vehicle usage as a result of COVID restrictions that continued throughout most of the first quarter of 2021. Uncertainty over ultimate costs has been recognised in a continued cautious approach to reserving.
Hastings’ operating ratio for the first quarter was 75.1% and profit before tax was £36.9million
Hastings continues to invest in, and make good progress on, its strategic and operational initiatives including:
Digital capabilities - More customers are choosing to make contact through the mobile app, and customer engagement and feedback on the app remains positive.
Claims transformation – Initiatives spanning accidental damage, third party property damage and bodily injury also continue to make good progress.
Product diversification - Home insurance customer policies were up 28% year-on-year.
New ways of working - Investment continues to be made in home and flexible working, which Hastings intends to continue beyond COVID to provide colleagues with a hybrid working model that encourages flexibility and collaboration.
Colleague engagement and development - Investment and focus on continued training and development and wellbeing of Colleagues, as well as on the diversity and inclusion agenda and the progression of women into senior roles.
Commitment to its communities - The Group has also applied an additional £100,000 in the first quarter of 2021 to its dedicated community fund to support local charities.
Whiplash reforms, designed to reduce the cost of small bodily injury claims, will come into effect across the UK market at the end of May. In addition, the final report on the FCA’s general insurance pricing practices market study is expected in May, with full implementation required by the end of December 2021. Hastings remains supportive of both reforms and its agile pricing, superior risk selection, and business model means that it is well positioned to adapt and become a net beneficiary versus competitors over time.
Toby van der Meer, Hastings Group CEO commented:
“Our business performance continues to be strong and we continue to make good progress on our strategic initiatives. As always, and especially during these difficult times, I would like to thank the entire Hastings team for the hard work and commitment in supporting our customers and the communities in which we work."
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Founded in 1996 in Bexhill-on-Sea on the Sussex coast, the Hastings Group is one of the leading general insurance providers to the UK market, with 3.1 million live customer policies and employing over 3,300 colleagues.
Hastings provides simple and straightforward products and services to UK car, bike, van, and home insurance customers with around 90% of policies directly underwritten by Group's Gibraltar based Underwriting business, Advantage Insurance Company Limited.
Hastings Direct is a trading name of Hastings Insurance Services Limited, the Group's UK broker, which also trades via 'Hastings Premier', 'Hastings Essential', 'Hastings Direct YouDrive', 'People's Choice' and 'insurePink'.
The Group operates as an insurance provider with two separate businesses. The Group's Retail business, Hastings Insurance Services Limited, is responsible for the end customer pricing, fraud management, product design, distribution, and management of the underlying customer relationships. The Group's Underwriting business, Advantage Insurance Company Limited, engages in risk selection, underlying technical pricing, reserving and claims handling.
Retail is supported by, and benefits from, Underwriting's prudent approach to risk and reserving and benefits from a panel of insurance partners which provide additional underwriting capacity. The Group's business model deliberately separates underlying product manufacturing from its distribution.